North Dakota Budget Talk -- 2021 - 2023 Biennium

I normally don't pay much attention to North Dakota legislative activity, but a four-hour flight from Grapevine, TX, to Seattle, WA, gave me an opportunity to spend some time doing just that. 

I was surprised how interesting this all was.

Some data points from Geoff Simon's top ND energy news for the week:

• ND legislative appropriations committee adopted an interim revenue forecast for the 2021 - 2023 biennium;
• income forecast:
• $40 / bbl through the biennium
• production to decline to 1.1 million bpd (2021-2022)
• production to decline to 1.0 million bopd (2022-2023)
• this would add just under $3 billion in oil tax collections over the coming biennium;
• compares to $3.5 billion expected in the current biennium (2019 - 2021)
• expenditures:
• $434 million to western North Dakota (formulaic)
• that would be down about 16% from the $518 million in the current biennium
• Legacy Fund: would realize $780 million in deposits
• from that $780 million:
• Common Schools Trust Fund: $127 million
• Foundation Aid Stabilization Fund: $127 million
• Three Affiliated Tribes: $373 million
• other income:
• sales tax revenue: $1.74 billion
• personal income tax: $816 million
• corporate income tax: $260 million
• motor vehicle excise tax: $260 million

Director's comments with release of Director's Cut:

• monthly crude oil production held steady due in part of 74 new well completions in November
• look at this: in December, 44 wells were completed, most of which were credited to the state's CARES Act frack incentive -- Helms said the number of completed wells in December would have likely dropped to zero without that incentive
• unlikely to see an increase in drilling activity unless prices stabilize above $55/bbl
• the industry continues to meet the natural gas capture target, 93%
• slightly slower on the reservation due to difficulty obtaining right-of-way for construction of gating pipelines (flaring will become less of a problem on federal land if the DAPL is shut down)
• mentioned the completion of Outrigger Energ's Sanderson NGL processing plant 15 miles west of Williston; capacity: 250 million cubic feet of gas per day (42,000 BOEPD?)

DOT:

• proposed budget: $1.8 billion for new biennium
• about $400 million more than current biennium
• that $400 increase possible if bonding (Legacy Fund) proposal accepted
• widening US Highway 85 from Watford City to I-94
• 2021 - 2023 budget includes $50 million to widen US Highway 85 from Watford City south to Long X Bridge
• requires US Congressional support
• phase 2: US Highway 85 from Long X Bridge to state highway 200
• phase 3: US Highway 85 from state highway 200 to I-94